ECN vs dealing desk: understanding what you're trading through
The majority of forex brokers fall into one of two categories: market makers or ECN brokers. The difference is more than semantics. A dealing desk broker acts as your counterparty. An ECN broker routes your order directly to liquidity providers — your orders match with actual buy and sell interest.
In practice, the difference shows up in three places: how tight and stable your spreads are, how fast your orders go through, and order rejection rates. A proper ECN broker will typically deliver tighter pricing but apply a commission per lot. Dealing desk brokers mark up the spread instead. Both models work — it comes down to how you trade.
For scalpers and day traders, ECN is almost always worth the commission. Getting true market spreads more than offsets the per-lot fee on high-volume currency pairs.
Fast execution — separating broker hype from reality
Brokers love quoting how fast they execute orders. Claims of sub-50 milliseconds look good in marketing, but how much does it matter in practice? It depends entirely on what you're doing.
For someone making longer-term positions, a 20-millisecond difference is irrelevant. If you're scalping 1-2 pip moves targeting quick entries and exits, execution lag translates to slippage. A broker averaging in the 30-40ms range with no requotes offers an actual advantage versus slower execution environments.
Certain platforms built proprietary execution technology specifically for speed. Titan FX developed a proprietary system called Zero Point which sends orders directly to LPs without dealing desk intervention — their published average is under 37 milliseconds. There's a thorough analysis in this review of Titan FX.
Commission-based vs spread-only accounts — which costs less?
This is something nearly every trader asks when choosing their trading account: should I choose a commission on raw spreads or a wider spread with no commission? It varies based on volume.
Take a typical example. A standard account might have EUR/USD at 1.1-1.3 pips. The ECN option shows 0.1-0.3 pips but charges around $3.50-4.00 per lot traded both ways. On the spread-only option, you're paying through every trade. If you're doing 3-4+ lots per month, ECN pricing works out cheaper.
Many ECN brokers offer both account types so you can pick what suits your volume. Make sure you do the maths with your own numbers rather than trusting hypothetical comparisons — broker examples tend to be designed to sell see this the higher-margin product.
Understanding 500:1 leverage without the moralising
High leverage polarises the trading community more than any other topic. Regulators have capped retail leverage at 30:1 in most jurisdictions. Offshore brokers still provide up to 500:1.
Critics of high leverage is that inexperienced traders wipe out faster. That's true — statistically, traders using maximum leverage lose money. What this ignores a key point: professional retail traders never actually deploy full leverage. What they do is use having access to more leverage to minimise the capital sitting as margin in each position — which frees funds for other opportunities.
Obviously it carries risk. That part is true. But blaming the leverage is like blaming the car for a speeding ticket. If what you trade benefits from less capital per position, the option of higher leverage means less money locked up as margin — and that's how most experienced traders actually use it.
Offshore regulation: what traders actually need to understand
Broker regulation in forex exists on a spectrum. Tier-1 is FCA, ASIC, CySEC. You get 30:1 leverage limits, require negative balance protection, and generally restrict the trading conditions available to retail accounts. On the other end you've got jurisdictions like Vanuatu and Mauritius and Mauritius FSA. Fewer requirements, but that also means more flexibility in what they can offer.
The trade-off is real and worth understanding: tier-3 regulation means 500:1 leverage, fewer trading limitations, and typically cheaper trading costs. In return, you get less investor protection if the broker fails. No investor guarantee fund paying out up to GBP85k.
If you're comfortable with the risk and prefer better conditions, regulated offshore brokers are a valid choice. The key is checking the broker's track record rather than only reading the licence number. A broker with 10+ years of clean operation under VFSC oversight can be more trustworthy in practice than a freshly regulated broker that got its licence last year.
Scalping execution: separating good brokers from usable ones
For scalping strategies is where broker choice makes or breaks your results. You're working tiny price movements and keeping positions for seconds to minutes. In that environment, seemingly minor differences in execution speed equal profit or loss.
What to look for is short: raw spreads at actual market rates, order execution consistently below 50ms, zero requotes, and explicit permission for holding times under one minute. Some brokers claim to allow scalping but throttle orders for high-frequency traders. Look at the execution policy before funding your account.
Platforms built for scalping will make it obvious. They'll publish average fill times on the website, and they'll typically offer VPS hosting for running bots 24/5. When a platform is vague about fill times anywhere on their site, that tells you something.
Copy trading and social platforms: what works and what doesn't
Copy trading took off over the past few years. The pitch is obvious: find profitable traders, copy their trades without doing your own analysis, and profit alongside them. In reality is more complicated than the marketing make it sound.
The biggest issue is time lag. When a signal provider opens a position, your mirrored order goes through milliseconds to seconds later — and in fast markets, the delay can turn a winning entry into a losing one. The more narrow the profit margins, the bigger the impact of delay.
Having said that, a few implementations are worth exploring for those who can't trade actively. What works is access to audited track records over at least 12 months, not just backtested curves. Risk-adjusted metrics matter more than the total return number.
Certain brokers build their own social trading alongside their regular trading platform. This can minimise the execution lag compared to third-party copy services that sit on top of MT4 or MT5. Look at the technical setup before trusting that the lead trader's performance will translate with the same precision.